There are numerous jurisdictions that can become attractive for investment purposes; as an investor, the decision of choosing a certain country for investment purposes depends on a wide range of factors – the sector in which the business will operate, the costs associated with the initial investment, the taxation system of a given country, the incentives (if any) offered by the local government to the respective field and numerous others.
For example, in Asia, investors can start a business in Malaysia, where they can obtain easily a virtual office, or in Labuan, a special region of Malaysia which offers a very attractive taxation system for corporate bodies. Some of the most common reasons for opening a company in Malaysia are the following: ● it ranks as one of the most attractive countries at a global level for doing business; ● it has a competitive economy (at a global level);● relevant tax benefits can be obtained by foreign companies through the double tax treaties signed here;● companies can also benefit from the provisions of the free trade agreements signed by Malaysia with the ASEAN countries;● foreign investors can obtain various incentives, depending on the business sector in which the company operates.
When choosing to set up a business in the region of Labuan, foreign businessmen can obtain a set of advantages. For instance, a local company can be registered with a share capital of only $1 and the legal entity can be registered with a single shareholder and one director. In terms of corporate taxation, Labuan provides numerous advantages, as presented below: ● a low corporate tax, of only 3% of the company’s annual turnover;● numerous tax exemptions – Labuan companies are not required to pay the value added tax, the customs duties or the sales tax;● investors can be exempted from paying the withholding tax on dividends or royalties;● foreign directors are not required to pay the personal income tax.
Other taxes are not applicable to local or foreign owned businesses and this is the case of Dubai, another attractive business destination which, even though is located in another part of the world, provides similar tax advantages. For example, businesses registered in Dubai benefit from numerous tax exemptions (the corporate tax is not applicable to most of Dubai businesses and it is imposed to banking institutions and oil companies). Dubai companies also benefit from an exemption on the withholding tax and the region is seen as an attractive business destination due to its political and economical stability.
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